Thousands protest in Croatian capital over government handling of hard-hit debtors

Sunday, April 26, 2015 - 01:00

Several thousand march in downtown Zagreb to voice anger over bank policies and the government's handling of debtors hit by a surge in the value of the Swiss franc. Rough Cut (no reporter narration).

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ROUGH CUT (NO REPORTER NARRATION)
STORY: Several thousand citizens from across Croatia protested on Saturday (April 25), in downtown Zagreb, voicing discontent with business policies of local banks and the slowness of state institutions in resolving the problem of debtors hit by a surge in the Swiss franc.
After marching towards the main square -- carrying banners saying "Stop debt slavery" and chanting "Thieves! Thieves!" -- the protesters split into two groups which then headed towards government offices and the central bank building.
"We came here today to show that we have had enough of debt slavery, that we want to have normal, free, lives," an unemployed woman from Zagreb and member of the association of Swiss franc debtors, Ivana Delas, told Reuters.
The protesters demanded the resignation of the central bank governor, saying that the central bank's failure to regulate local banks was instrumental in the Swiss franc surge which made many Croatian families incapable of making ends meet.
About 60,000 Croatians hold Swiss franc-denominated loans, mainly taken out during the 2000s when many in central and eastern Europe were attracted by low Swiss interest rates offered by local banks.
The loans are altogether worth some 27 billion kuna (3.85 billion US dollars) or around eight percent of Croatia's gross domestic product.
Since then a strong franc has driven the loans' costs sharply higher.
"Believe me, it's very hard," said Bojan Lakovic from the Adriatic town of Opatija, who recently lost his job working on an oil platform.
"Because it is impossible to repay the loan, it's absolutely impossible," he said. "For example, you take out a loan of 100 something, you repay it in instalments over seven years, then you ask the bank how much more do you owe, and then they tell you still have 130 to pay."
The government fixed in January the Swiss franc rate against the kuna currency at 6.39 for one year to ease pressure.
Debtors' association said the banks were not acting in line with regulations when changing the level of interest rates and that the central bank had failed to prevent irregularities.
Earlier this week Finance Minister Boris Lalovac warned local banks, some 90 percent of which are in foreign hands, that the government would have to react unless they offer a fair long-term solution for holders of loans pegged to the Swiss franc.
The conversion of loans in Swiss francs into the euro-denominated ones is seen at the moment as the most likely solution, but the details of conversion are yet to be defined.